While the hospitality sector in Hong Kong, Macau, and mainland China is gradually recovering, external factors such as geopolitical tensions and rising operational costs are hindering a full rebound, Shun Tak noted.
In a regulatory filing, Shun Tak Holdings Limited remarked that “throughout the first half of 2024, the occupancy rate improved slightly to 63%.”
Shun Tak, a prominent player in the transport, property, and hospitality sectors reported an interim loss of HKD428 million (USD55 million) for the first half of 2024, a slight increase from HKD425 million loss in the same period last year.
Despite the financial setback, the company experienced a significant revenue boost, with figures soaring by 44.6% to HKD2.16 billion.
The firm attributed its losses to ongoing challenges stemming from the Covid-19 pandemic, which have continued to impact its operations since 2022.
The company’s hospitality segment, which includes a 51% stake in the Mandarin Oriental Macau, reported a loss of HKD86 million, a stark contrast to a profit of HKD6 million during the first half of 2023. In Macau, key properties include the Grand Coloane Resort, the Mandarin Oriental Macau, and the Artyzen Grand Lapa Macau, along with the Macau Tower Convention & Entertainment Centre.
Operating profit for the first half of 2024 stood at HKD199.7 million, a notable recovery from a loss of HKD116.8 million in the corresponding period last year. The underlying loss, adjusted for unrealized fair value changes on investment properties, was HKD108 million, significantly improved from HKD274 million in the first half of 2023. The basic loss per share was reported at 14.2 Hong Kong cents, slightly up from 14.1 cents a year ago.
In terms of property performance, Shun Tak capitalized on the relaxation of property curbs in Hong Kong and Macau, selling 65 units in its Nova Grand project in Taipa, which has seen a 92% sales rate as of June 30. The company’s property segment reported a profit increase of 62.8% to HKD363 million, showcasing resilience in a challenging market.
The company also highlighted its shopping malls’ performances, particularly Nova Mall, which faced challenges due to changing consumer behaviors post-pandemic, with residents increasingly shopping across the border in Guangdong province. Despite these challenges, Nova Mall maintained an occupancy rate of 84% as of June 30.
Looking ahead, Shun Tak remains cautious about the economic outlook for the latter half of 2024, citing uncertainties from global macroeconomic factors and geopolitical tensions. The company is focusing on leveraging its extensive transport portfolio, including ferry services and shuttle bus operations, to tap into the regional traffic in the GBA.
Nadia Shaw
No Comments